Smartphone Navigation Apps Slash Device Sales

Makers of dedicated navigation devices are feeling the impact of the growing use of personal navigation apps found on many of today’s smartphones and tablets.

Indeed, according to a research report from analyst firm Berg Insight, the growing smartphone adoption and broader availability of attractively priced location-based services are key factors for growing usage of mobile navigation apps.

Shipment Decline

It also found that the number of mobile subscribers worldwide using a turn-by-turn navigation app on their handset at least once per month grew from 105 million in 2011 to 150 million in 2012.

However, this growth in the use of mobile devices and turn-by-turn navigation apps came at the expense of global shipments of personal navigation devices (PNDs), which declined to 28 million units in 2012 from 33 million units in 2011.

As retailers have reduced shelf space and marketing for PNDs in favour of higher margin consumer electronics products, competition from other navigation solutions, notably navigation applications for smartphones, is growing. The report noted that even though part of the decline can be attributed to lower consumer spending in Europe resulting from the continuing sovereign debt crisis, other developments are also affecting the PND market, including the fact that the installed base of PNDs is already high, especially in mature markets.

Although shipments of PNDs are still growing in markets such as Eastern Europe, South America and India, this growth is not fast enough to compensate for the decline in mature markets, and smartphone and tablet growth in these markets is also skyrocketing. Based on these factors, Berg forecast that global PND shipments will decline to about 17 million units in 2017.

In most developed markets, smartphones from major vendors now come bundled with free navigation apps. Google and Nokia were the first to launch free navigation and have later been followed by Apple and BlackBerry, although Apple’s mapping application was met with widespread derision for being incomplete, and the company eventually issued a formal apology for the execution of the app.

Google, of course, didn’t sit on the sidelines during Apple’s debacle. It rushed its own stand-alone Google Maps app for iOS into production, releasing it through the Apple App Store last December. The app hit the 10 million download mark in the first 48 hours that it became available.

Popular App

Mapping applications are one of the most prevalent apps in use, and more than half of the current active navigation subscriber base uses free apps that are bundled with handsets or service plans from mobile operators.

Mobile operators are also looking to monetise these free apps by offering premium services and advertising, allowing users to customize their mapping apps through content add-ons and features available for purchase, such as including traffic information, speed camera alerts, parking space information, local search and local offers.

The report noted that complementing core navigation with features could make navigation apps useful on a daily basis for more potential customers. “Stimulating usage is important for app developers and mobile operators that want to pursue additional revenues from advertising,” André Malm, a senior analyst with Berg, said in a statement.

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Originally published on eWeek.